International business

European Union and China Comprehensive Agreement on Investment

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On the 30th of December 2020, the EU and China have concluded in principle the negotiations for a Comprehensive Agreement on Investment (CAI). This agreement will create a better balance in the EU-China trade relations and, in our view, create even more opportunities in the future for foreign direct investment (FDI) between the EU and China.
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Over the last 20 years, the foreign direct investment from the EU to China reached more than 140 billion euros. From China to EU, the FDI is almost 120 billion euros.

President of the European Commission, Ursula von der Leyen said: “Today‘s agreement is an important landmark in our relationship with China and for our values-based trade agenda. It will provide unprecedented access to the Chinese market for European investors, enabling our businesses to grow and create jobs. It will also commit China to ambitious principles on sustainability, transparency and non-discrimination. The agreement will rebalance our economic relationship with China.”

President Xi Jinping says this agreement ‘shows China’s determination and confidence in fostering high-level external openness.’ He also said: ‘ 2021 is soon arriving. As the world’s two leading powers, two civilisations, China and Europe should show commitment, act proactively, strengthen dialogues, deepen trust, properly handle differences, join hands to nurture new opportunities and usher in a new era.”

China is making efforts for EU investments in various services sectors, such as , financial services, private healthcare, environmental services, international maritime transport and air transport-related services.

Both sides are now working towards finalising the final wording of the agreement, which will need to be legally reviewed and translated before it can be submitted for approval by the EU Council and the European Parliament.

Opportunities

As one of the Founding Partners of IMPACT 2030, Grant Thornton embraces the mission of helping to achieve the United Nations’ 17 Sustainable Development Goals. The CAI binds the parties into a value-based investment relationship grounded on sustainable development principles. As the trend towards sustainability gathers pace, mid-market businesses have to make this transition and embrace sustainability to be future proof. This is a great opportunity for both Chinese and European companies. This global pandemic creates opportunities for us to support our clients to transform their business models unlocking new value for business, customers and society in a post-COVID-19 world. 

Grant Thornton European China Desks

Although there are still many cultural differences between the EU and China, we trust that this agreement will only get us closer to each other and strengthen mutual collaboration.

Grant Thornton European China Desks and Grant Thornton China support this agreement and, together with our clients, we look forward to building a brighter future.

Contact

Do you wish to understand what opportunities this agreement has for your business? Please contact your local China Desk.